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Hoa Fees

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Flianbrian

Sophomore Member
Joined
Mar 25, 2015
Professional Status
Certified Residential Appraiser
State
Colorado
How do you adjust for HOA fees? If they are close, I generally don't adjust. But in this case, there is a difference of over $200 per month. Paired sales is not helpful, as the properties pair like a fine wine pairs with a bag of doggy doo.
 

Flianbrian

Sophomore Member
Joined
Mar 25, 2015
Professional Status
Certified Residential Appraiser
State
Colorado
These are not really comps by the clashing sound of it. :shrug:

I wondered how long it would take to get that response. What do you do, make up comps if they aren't model matches?

This is in a market where government restrictions have created an extreme shortage in lower priced condos. It's near a university, so many are rentals. There is very little turnover. In the last year, there were two sales in the project out of 89 units.

There are other projects nearby with similar units, but generally lower fees. The available comps and the subject are over thirty years old, some with no updating, some dressed to the nines. Some with in-unit laundries, storage, courtyards, garages, open space parking, and so on. So, if you can find me a model match with even just a few differences where I can extract a market reaction to the fees, I'll give you $100.

Until then, perhaps someone has a useful suggestion?
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
Due to the lack of market data , no adjustment was made. blah blah blah
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I wondered how long it would take to get that response. What do you do, make up comps if they aren't model matches?

Well, they are far from ideal, but if that's all there is........
I don't think I have ever adjusted for HOA fee diffs, or amenity diffs.
More amenities usually = higher HOA fees.

Not sure I've ever had to push that far for condo comps.
Good luck.
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
I want to see the list of dum dums adjusting for HOA fees.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
look at past sales in the different $ HOA project vs other past sales in your subject or projects you are using,,, If no clear difference/pattern found, then report it, if the$200 a month more community shows a pattern in a number of their sales of more or less in prices than that is the market reaction. I rarely make an adjustment for HOA fees unless market shows a clear difference, and $200 a month is not an enormous differential. Good luck!
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
in this case, there is a difference of over $200 per month.
And what are the differences in amenities and services? Do both projects include allowances for reserves?
 

Flianbrian

Sophomore Member
Joined
Mar 25, 2015
Professional Status
Certified Residential Appraiser
State
Colorado
and $200 a month is not an enormous differential. Good luck!

Thanks for the well wishes! $200 is substantial when its a difference between $115 and $315. How much more mortgage could you afford if your monthly payment for housing was $200 less? My financial calculator says $39,472 more. But that's not the market reaction.

Comparing projects might be helpful in an area where there are similar projects with lots of sales in each project, but in this market there are few sales. I've got seven comparable sales in the last twelve months for all of the projects in the market area.
 

djd09

Elite Member
Joined
May 20, 2009
Professional Status
Licensed Appraiser
State
Ohio
The typical buyer does not contemplate the difference of hoa fees and the amount of money they will or will not pay for the property. Don't ruin a great gig.
 
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